Loyalty to a restaurant may be a concept that many think is dying out, but Jan-Pieter Lips of marketing and loyalty analytics company Aimia, explains why finding the right way to reward customers by using the data you have compiled on them will help win business in the long-run
The food and drink industry has cause to be hopeful as 2016 gets under way. The Office for National Statistics (ONS) recently reported people are spending more on leisure and this has impacted dining-out trends. Two years ago, according to our research at Aimia, half of the population was choosing to stay at home rather than eat out. Today, this number has halved as people are starting to feel more positive about their finances.
However, with prosperity, it seems, comes customer promiscuity and increased spending is accompanied – and perhaps overshadowed – by ever more competition.
According to our latest research, just one in five consumers say they are loyal to their favourite restaurant. Data from Cardlytics, a card-linked marketing firm, has shown that even customers who claim to be loyal to a certain restaurant actually spend over half of their eating-out budget elsewhere.
Customers might be eating out more, but it’s becoming harder for restaurants to remain the venue of choice. With the number of food and drink units in the UK having grown by almost 20% in the past five years, how can dining establishments keep their existing customers and win new ones?
In years gone by, we may have heralded traditional loyalty schemes as the answer. Yet our latest data at Aimia shows that the proportion of the population who are members of a restaurant loyalty scheme has fallen from a quarter a year ago to fewer than one fifth. Old-style reward programmes, where customers receive a stamp for every visit, are resonating less with restaurant goers now.
We shouldn’t be too quick to dismiss the value of loyalty schemes, though. A look elsewhere shows what customers now really love is when a loyalty scheme rewards them personally. Take Selfridges, which has attributed its record sales to a growth in bespoke services, from personalised
Champagne to jars of Nutella. In the grocery sector, Nectar members are presented with the most relevant offers according to their shopping history when they login to the scheme’s app.
Within the restaurant industry, GBK’s loyalty app is a good example of personalisation done well. It doesn’t just give out standardised freebies for repeated custom, but rewards members with benefits according to their tastes, engaging them while doing so via a gaming element. Diners earn ‘badges’ for participating in challenges, which then equate to free food. Elsewhere, Frankie and Benny’s members can input their preferences into the company’s app, which then creates an individualised menu including dishes that suit their tastes.
Personalised customer service is becoming an imperative in building long-term relationships with customers, and restaurants need to take note.
There’s no point in offering reduced desserts to a customer who doesn’t have a sweet tooth. Instead, why not offer customers deals based on what they like? For example, GBK rewards customers who order extra jalapenos on their Habanero burger by giving them a free drink to help them handle the heat. It is details like this that create lasting memories of the dining experience to set you apart from the competition.
While there are some good examples in the industry of progress being made, the sector still has a long way to go in delivering a personalised service to customers.
We asked consumers how relevant they thought the communications were that they received from a range of different sectors – from banks and supermarkets through to restaurants and airlines. Food and drink establishments were ranked as the least likely to send very relevant communications, and our research shows six in 10 people are now deciding to cut brands off that send them irrelevant messages. This is a missed opportunity.
Two fifths (41%) of the population say they are willing to share personal information so they can receive relevant offers and discounts. This is particularly the case with millennials, who are the most loyal to food and drink establishments and more will-ing to share their data than any other age group. There is an open door for businesses willing to step forward.
Restaurants need to get smart with customer data and use it to personalise their offer. Offers should be for the customer’s local branch and for the types of dishes they like. Customers don’t want to feel like just another faceless seat-occupier. They want their custom to be personally valued. Their data allows operators to ‘know’ them – so it is only right they expect to be rewarded with relevant offers.
With all of the choice on offer, customers are never going to ‘stay faithful’ to a single establishment. Good food and service are always going to play a huge role in attracting people – that’s a given. Yet there are measures that operators can take to increase their share of consumers’ spending on dining out. Strengthening relationships through smart use of data can help them edge ahead of competition.
Jan-Pieter Lips is president of international coalitions at Aimia, a data-driven marketing and loyalty analytics company.
